Diversity is not About Finding Unicorns

For a long time, I considered diversity a "nice to have" element. I supported it in principle, but always with the caveat, "if we can find the right person." As I saw it, diversity was a goal to be pursued as long as it didn't compromise the strength and cohesion of the team. I considered myself fortunate when finding a candidate from another background who (as I saw it) was able to meet our high standards for performance – a unicorn.

Recently I came across two articles which have entirely changed my perspective. In the first Guess Who Doesn't Fit In at Work, Lauren Rivera from the Kellogg School of Management looks at the role of cultural fit in hiring practices. She points to a survey indicating that 80% of employers worldwide named cultural fit as a top priority. Yet what does that mean in practice? Research by Rivera and others indicates that "fit has become a catchall used to justify people who are similar to decision makers and rejecting people who are not." Not surprisingly, hiring people like ourselves will reduce demographic and cultural diversity; beyond that, it turns out to be a poor predictor of performance. Just as people are notoriously bad at spotting liars, it is easy for hiring managers to mistake rapport for skill. As I look back on my own hiring decisions, there is no question in my mind that I have fallen into this trap at times.

A second article How Diversity Makes Us Smarter, I found even more challenging to my assumptions. The authors point to several studies showing the impact of diverse teams on company performance. For example, Deszo and Ross studied the S&P 1500 and found that "female representation in top management leads to an increase of $42 million in firm value." In 2006, the author and a team set out to study "the impact of racial diversity on small decision-making groups...where sharing information was a requirement for success" (sounds a lot like today's workplace). Given the task to solve a murder mystery, they found that groups with racial diversity significantly outperformed the racially homogeneous groups. These results have been supported by other studies and apply to other types of diversity such as disabilities and even political orientation.

Yet the authors have another surprise in store: the improved performance of diverse teams is consistent regardless of the skills and experience of the members. In other words, the improvement is not a function of finding diverse members who meet certain criteria, but rather comes through group dynamics. "When disagreement comes from a socially different person, we are prompted to work harder. Diversity jolts us into cognitive action in ways that homogeneity does not." Simply being in a diverse group makes the members drop their predefined assumptions, work harder, and maintain a more open-minded stance. This in turn leads to improved results.

Taken together, these articles make a powerful argument. First, that hiring managers are generally bad at assessing talent, and that their judgments will be heavily influenced by their social and cultural affinity for the candidate. Second, that a diverse team will outperform a homogeneous one across a wide range of collaborative activities, independent of their background and qualifications. In other words, pursuing diversity shifts from a demographic argument to one of enlightened self-interest.

Of course, one may reasonably ask what diversity means in a relatively homogeneous region like Eastern Washington. To attempt an answer, I looked at two data sets for the seven counties served by EHF: U.S. census estimates from 2014, and public school data from 2016. Here is a summary:

If indeed children are our future, then our region will undergo significant changes in the coming years. Note in particular the growth in the percentages of those identifying as Hispanic and two or more races.

Through a demographic lens, we may view this as a challenge for enterprises to reflect the future makeup of their community / customers. More powerfully, there is a rising wave of talent which, if engaged, will strengthen our teams and organizations. At EHF, we are in the process of integrating diversity into all aspects of our work; not just because it is the right thing to do, but because it is the smart thing.

-Mike Yeaton, Chief Strategy Officer for Empire Health Foundation